Houston Men Charged for Illegal Exports to Iran

HOUSTON (CN) – Two Houston businessmen were arrested and charged with shipping microelectronics used to build missiles to Iran in violation of federal trade sanctions, the Justice Department said. Bahram Mechanic, 69, and Tooraj Faridi, 46, are the owner and vice president of Smart Power Systems Inc., respectively. They were arraigned Friday morning before a federal magistrate judge after a 24-count indictment was unsealed Thursday which charged them, three other people and five companies with violating the International Emergency Economic Powers Act. The charges are a stark reminder that despite a preliminary deal between Iran, the United States and other world powers to allow inspection of its nuclear program in return for an ease of trade sanctions reached earlier this month, the rules are still in place. Talks continue between Iran, the United States, China, France, Germany, the United Kingdom and Russia to hash out the deal’s details by the end of June. For those who violate the United States’ sanctions against Iran there are harsh penalties. If convicted, those charged in the Houston case face up to 20 years in prison and the corporate defendants face up to $1 million fines for each violation of the act. Mechanic co-owns Houston-based Smart Power Systems with Khosrow Afghahi, 71, of Los Angeles, who was also charged in the case. Mechanic and Afgahi also own the Faratel Corporation, which is Smart Power’s sister company in Iran, the U.S. Attorney’s Office said. Faratel Corp. regularly sent Mechanic lists of products to procure, including U.S.-made microelectronics, according to the indictment. Mechanic would then ship the products to Iran, being careful to skirt a government licensing system that regulates exports. “The microelectronics shipped to Iran allegedly included microcontrollers and digital signal processors. According to the indictment, these commodities have various applications, and are frequently used in a wide range of military systems, including surface-air and cruise missiles,” federal prosecutors said. “Between July 2010 and the present, Mechanic’s network allegedly sent at least $24 million worth of commodities to Iran,” prosecutors added. The indictment involves defendants from across the globe. Also charged are Arthur Shyu and the Hosoda Taiwan Limited Corporation in Taiwan; Matin Sadeghi, 54, and Golsad Istanbul Trading Ltd. in Turkey; and the Faratel Corporation. Mechanic, Shyu and Afgahi were also charged with money laundering and conspiracy to commit money laundering.